Local Investment ClimateSunflower Value Chain for

Dodoma and Kigoma regions

Presented to Stakeholders on 28/08/14By

Charles Ogutu (MRA Management Associates Ltd

Study Area

Methodology

• Multi dimensional approach• Interviews with different actors• Focus group discussions• Literature reviews• Observations• Synthesis and analysis of information

BackgroundConsumption of Vegetable Oils

Global Production of Sunflower

Sunflower Value Chain

There are constraints at all levels of the Chain. Process and product upgrading currently missing

Inputs

Agro dealers

Producers

Traders

processors

Retailers

Consumers

Constraints-1

• Quality of inputs• Access to and distribution of inputs• Access of finance• Extension services• Subsistence farming-• Limited knowledge on GAP• Pests and diseases• Weather

Constraints-2

• Limited trust between producers and traders/processors

• Storage facilities• Road infrastructure• GMP issues• Branding• No wholeselling -direct selling

Supporters of Sunflower

GOVT• Central Government: Supports subsidy through voucher, training and

setting, enforcing and monitoring of standards through its agencies such as TBS and TFDA

• Local Government Authority: Tasks with improvement of the local infrastructure and extension services

NGO/Private• International/Local and CBOs.• Supports farmer groups/AMCOS strengthening trainings, market

linkage, advocacy, provides some extension, Value chain development, agronomic knowledge, linkage for financial access grant provision etc

• Provision financial credits by banks, MFIs and NGOs

Research • Undertakes research on new breeds, soil analysis and certification of new sunflower breeds

Sunflower & oilseeds Production Trends in Tanzania (MT)

Product 2009 2010 2011 2012 2013 %

Sunflower 162,019 348,877 786,902 1,125,000 2,625,000 51%

Groundnuts 256,401 320,582 651,397 810,000 1,425,000 28%

Sesame 72,932 65,557 357,162 456,000 1,050,000 20%

Palm Oil 17,000 17,000 24,880 40,500 .79%

Soya 3,900 4,300 2,500 3,490 5,830 .11%

Production in Kongwa and Dodoma

? Dodoma Urban-2010-14 Kongwa-2010-14 ?

1 2 3 4 5

2010 2011 2012 2013 2014

Hectares 10114 18354 19404 19764 10944

MT 2654 11012 13583 9882 9850

2500

7500

12500

17500

22500

Dodoma Municipal -sunflower production Trend

Culti

vate

d la

nd a

rea

(H)

1 2 3 4 5

2010 2011 2012 2013 2014

Hectares 2178 592 2993 24688 20034

MT 708 200 3592 29626 14024

2500

7500

12500

17500

22500

27500

32500

Kongwa District -sunflower production Trend

Culti

vate

d la

nd a

rea

(H)

Sunflower oil production –Estimates for 09-2013 (MT)2009 2010 2011 2012 2013Seed Kernels produced

162,019 348,877 786,902 1,125,000 2,625,000

Exports 50 130 146 778

Est. PHL and Recycled 15%

24,303 52,332 118,035 168,750 393,750

Processed kernels

137,716 296,495 668,737 956,104 2,230,472

Sunflower oil 41,314 88,949 200,621 286,831 669,142

1 bag of 70 Kg produces 20 Liters of Oil .Tanzanian average consumption is 14 Liters of sunflower oil PA

0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.50

100000200000300000400000500000600000700000800000

Sunflower Oil Production (MT)

Year Vol

Edible oil Imports (TRA records) Year 2009 2010 2011 2012 2013

Quantity (MT)

169,987 156,268 248,479 223,076 221,858

0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.50

50000

100000

150000

200000

250000

300000 Edible Oil Import trend 2009-2013

Year Vol

Importation of Edible Oil (BIDCO)

2008.5 2009 2009.5 2010 2010.5 2011 2011.5 2012 2012.5 2013 2013.50

5000

10000

15000

20000

25000

30000

25000

27000

18000

13000

9800

Year

Qua

ntity

(Ton

s)

Price Trends for Seed Kernels (70KG bag, Cake (45kgs) and 20 Liter Oil (source: CEZOSOPA, farmers and traders)

2009 2010 2011 2012 2013

Kernels

15000 35000 25000 38000 40000 55000 35000 50000 35000 58000

Oil 40000 44000 40000 48000 48000 60000 50000 60000 60000 60000

Cake 4500 4500 6750 9000 9000 11250 11250 11250 13500 13500

2009 2009 2010 2010 2011 2011 2012 2012 2013 20130

10000

20000

30000

40000

50000

60000

70000

Price Trend 2009-2013

Kernel

Cakes

Oil

Tanz

ania

Shi

lling

s

Sunflower oil Processing in Kongwa and Dodoma

• Processors: There are 61 Processors in Dodoma Urban and 29 in Kongwa district. Only 33 have ever registered with CEZOSOPA.

• Processing is at an average of 90 man days/PA• Processors process average of 20 bags of 70kgs in a

day during production. Chinese y105 is mostly used.• Avg. Sunflower processed is 7,560 MT of kernels =

2,268 MT sunflower oil in Dodoma and 3,654 kernels in Kongwa= 1,096 MT Sunflower oil, PA.

• Kasulu District has only 4 processors

Certifications and Oil refining

• 4 Processors have received TBS certification in Dodoma: Nyemo Investment, Jackma Enterprises, Heshima ya Jiko and Kisasa Supplies.

• There are 2 Mini refineries installed by Nyemo and Heshima ya Jiko

• 2 Complete refineries delivered for installation at Uncle Milo and Jackma Enterprises (support by USAID-PCP)

Marketing of Sunflower- Oil and Cake

• Processors sell oil directly to consumers and to retailers. No Whole sellers were seen. No oil from Dodoma was found in supermarkets in Dar

• Cake mainly bought by Traders to different destinations.

• In Kongwa, road side selling of oil is rampant.• Farmers are slowly selling oil instead of kernels

Whole sale trend of Korie (palm oil) in Dodoma Urban

1 2 3 4 5

9 10 11 12 13

Tons 2367 2027 1696 1386 1113

#REF! 1 NaN NaN NaN NaN

250

750

1250

1750

2250

Supply of Korie Oil by Murzah into Dodoma (MT)

Korie

Oil

brou

ght i

nto

Dodo

ma

Prices for Sunflower oil in Dar es salaam- Imalaseko Supermarket (July 2014

Exports of Sunflower Products/seed meal and cake via Namanga border Source: PHS Namanga)

2008.5 2009 2009.5 2010 2010.5 2011 2011.5 2012 2012.5 2013 2013.50

5,000

10,000

15,000

20,000

25,000

14,494

18,84420,100

13,042

10,873

Sunflower seed meal/Cake

Year

Qua

ntity

(Ton

s)

Exportation of Sunflower Seed kernels (flowers) Source: PHS Northern Zonal Office

2009.5 2010 2010.5 2011 2011.5 2012 2012.5 2013 2013.50

100

200

300

400

500

600

700

800

900

Exports of kernels (Flowers)

Tons

Margin % share amongst the actors per bag of 70kg kernels

Dodoma and Kongwa Kasulu

Farmers22%

Traders 2%

Processors55%

Transporters 21%

Margin percentages share in Kasulu

Farmers3%

Traders 2%

Processors69%

Transporters26%

Margin Percentage Share in Kongwa and Dodoma

Conclusion

• Competitiveness of the commodity is only possible with Value addition.

• THANK YOU FOR LISTENING